Wind Power Investors Interested in Nicaragua

Wind-energy investors are eyeing Nicaragua as the government of President Daniel Ortega is expected to open a bidding process to increase the country’s wind energy production capacity by another 40 megawatts, an industry insider said.

“We’re hoping that there’s going to be a bid process for more wind capacity in Nicaragua in the coming months. The government is looking at having a bidding process to contract another 40 megawatts of wind (power),” said Steve Ihnot, financial manager of the Costa Rica-based Mesoamerica Energy.

Myriad foreign investors and foreign governments that the Ortega government considers new “strategic allies” have expressed interest in Nicaragua’s wind potential and other renewable energy resources.

Interest in renewable energies peaked last year when oil prices reached above $140 a barrel on the heels of rolling energyrationing blackouts, which the Ortega government was able to put an end to in 2008.

Wind power is a key component in the Ortega government’s plan to reduce Nicaragua’s dependence on oil-based energy to 3 percent by 2013 (NT, Jan. 9).

Hydroelectric, geothermal, wind and ethanol-based energies currently provide about a third of the country’s energy.

A new $95 million, 19-windmill wind plant in La Virgen, Rivas, which was developed by Amayo with financing from the Central American Economic Integration Bank, is scheduled to go on line in the coming days, providing 40 megawatts of power and bringing Nicaragua’s wind-power production to six percent of country’s total grid.

One of the lead developers in the La Virgen project, Arctas Capital Group of Houston, Texas, is reportedly in advanced stages of expanding the project by as much as another 40 megawatts, according to a statement from the Nicaraguan Energy Company’s President Ernesto Martinez Tiffer.

Martinez said in a statement on a government Web site that Russia is also eyeing Nicaragua’s wind and geothermal sector and plans to expand the country’s capacity by as much as 250 megawatts. Iran, Brazil and Mexican billionaire Carlos Slim, the world’s second richest man according to Forbes, have also expressed interest in investing in Nicaragua’s renewable energy sector, reports the Associated Press.

Italian wind producers R.E. Wind met with Nicaragua’s Foreign Minister Samuel Santos earlier this month to explore the possibility of investing in renewable energies, including wind. R.E. Wind representatives have been exploring the possibility of investing in wind projects in Rivas, according to a statement from the Foreign Ministry.

“All of Central America has very interesting renewable energy resources due to the fact that there is no local supplier of fuel, oil or coal. Renewable energy is very competitive on its own. You don’t need subsidies,” said Ihnot.

The Costa Rica-based Mesoamerica Energy owns what was the first commercialscale wind energy project in Latin America, a 23 megawatt project in northern Costa Rica. The company is now developing a 100 megawatt wind project in Honduras, which will be the largest in Central America.

Mesoamerica acquired the Nicaraguan wind power company CINETICA in 2004 and has since acquired rights to several projects in Nicaragua with a combined potential of 100 megawatts.

The Ortega administration is also moving forward on plans to expand the country’s enormous geothermal reserves. The government recently approved a $19 million concession for the U.S. firm Proyecto Geotermico Casita-San Cristobol to explore for geothermal energy around Nicaragua’s biggest volcano. It is the third geothermal contract approved in Nicaragua.

Israeli company Ormat is developing a geothermal project on Momotombo while Canadian group Polaris Geothermal has a contract in San Jacinto Tizate. Polaris is currently looking to secure $120 million in financing for a 24 megawatt second phase at its 8.5 megawatt San Jacinto Tizate plant near Leon, according to a Polaris statement.